Following the approval of shareholders at the General Shareholders Meeting on July 12, 2016, AccorHotels Group officially announces the acquisition of FRHI Hotels & Resorts (FRHI) and its three prestigious luxury hotel brands: Fairmont, Raffles and Swissôtel. This addition of three remarkable brands instantly positions AccorHotels as a leading player in the global luxury hotel market, increases long term growth potential and profitability, and significantly expands the company’s footprint in North America, the world’s largest and most influential consumer market.
“Today is a great day for our Group. The acquisition of these three emblematic luxury hotel brands is a historical milestone for AccorHotels. It will open up amazing growth prospects, lift our international presence to unprecedented heights, and build value over the long term,”
says Sébastien Bazin, Chairman and Chief Executive Officer of AccorHotels.
Joining AccorHotels’ global network is a portfolio of globally admired brands, which includes management of many of the world’s most iconic and historic hotels located in key strategic cities around the world, including: The Savoy in London, Raffles Singapore, Fairmont San Francisco, New York’s The Plaza, Fairmont Le Château Frontenac in Quebec City, and Le Royal Monceau Raffles Paris.
Combining FRHI’s proven track record and deep expertise in operating and marketing luxury hotels, with AccorHotels robust global operating platform, extensive loyalty base and industry leading digital capabilities, means the Group is uniquely positioned to deliver the most profitable returns and best growth potential across all market segments. “We remain committed to providing guests with unparalleled service, while also keeping the ambition to deliver exceptional return on investment for our shareholders and hotel owners,”
added Bazin. “By leveraging the operational synergies between FRHI and AccorHotels, we are well-positioned to accelerate the growth of our luxury brands and offer guests even more exciting hotel choices and destinations to explore.” Chris Cahill appointed as the Group’s CEO Luxury Brands
In support of the acquisition, and as part of AccorHotels’ larger strategy to strengthen its luxury and upscale business, the company has appointed Chris Cahill as the Group’s Chief Executive Officer, Luxury Brands. In this newly created role, Chris, who will also become a member of AccorHotels’ Executive Committee, will lead the FRHI integration process and be responsible for the strategy and global operations of AccorHotels Luxury Brands. This new structure will include Raffles, Fairmont, Sofitel Legend, So Sofitel, Sofitel, MGallery by Sofitel, Pullman and Swissôtel.Closing Details
Following the approval of shareholders at the General Shareholders Meeting on July 12, 2016, the transaction with Qatar Investment Authority (QIA) and Kingdom Holding Company (KHC) of Saudi Arabia provided $840 million (€768 million) cash payment and the issuance of 46.7 million AccorHotels shares in consideration for the contributed FRHI shares. The transaction gives QIA and KHC respective stakes of 10.4% and 5.8% in Accor’s share capital.
AccorHotels plans to generate approximately €65 million in revenue and cost synergies thanks to the combination of brands, the maximization of hotel earnings, the increased efficiency of marketing, sales and distribution channel initiatives, and the optimization of support costs. Significant enhancements will also be made in terms of customer data, thanks to the integration of FRHI’s customer base that includes three million loyalty members, of which 75 percent are in North America.New Group's governance
The shareholders also approved the appointment of six new directors: Aziz Aluthman Fakhroo
and Ali Bouzarif
, proposed by Qatar Investment Authority, Sarmad Zok
, proposed by Kingdom Holding Company, and Jiang Qiong Er
, Isabelle Simon
and Natacha Valla
as independent directors.
The Board of Directors now has 16 members, including one employee representative director. Seven directors are women and 9 are independent. A new employee representative director will be appointed by the Group’s European Work Council within the next few weeks, in accordance with the company’s bylaws.
Sébastien Bazin, Chairman and CEO of AccorHotels, commented: “The 6 new Board members who have been appointed by our shareholders today are bringing tremendous diversity and experience to AccorHotels’ Board. I am convinced that their complementary backgrounds and views will be of great support to continue developing our growth and innovation strategy in the future.”